Financial Data and Key Metrics Changes - Total revenues for Q3 2019 decreased by 10% to $27 million compared to $30.1 million in the same period last year, reflecting a transition to SaaS and a difficult comparison due to a large license fee transaction in the prior year [6][10] - Subscription fees increased by 43% to $3.7 million from $2.6 million year-over-year [6] - Software license fee revenues decreased by 71% to $1.7 million from $6 million in the same period last year [6] - Overall gross margin was 52% for the current quarter, down from 57% in the prior year [8] - GAAP net income decreased by 58% to $2.3 million or $0.07 per diluted share compared to $5.6 million or $0.18 per diluted share in the same period last year [10] Business Line Data and Key Metrics Changes - Cloud services' annual contract value (ACV) increased by approximately 48% to $16.1 million compared to $10.9 million in the same period last year [6] - Professional services and other revenues were $10.2 million, slightly down from $10.3 million year-over-year [7] - Maintenance revenues increased by 2% to $11.4 million compared to $11.2 million last year [7] Market Data and Key Metrics Changes - International revenues accounted for approximately 17% of total revenues, down from 20% in the prior year quarter [11][14] - Year-to-date international revenues were 19% of total revenues compared to 20% for the same period last year [14] Company Strategy and Development Direction - The company is focused on transitioning to a software-as-a-service (SaaS) engagement model, which is expected to improve financial predictability and profitability [16][18] - The company aims to deliver a digital planning suite to enhance customer management from product concept to delivery, facilitating a more connected enterprise [18][20] - A new Executive Vice President of Global Sales has been appointed to lead the direct sales force, focusing on enterprise companies undergoing supply chain transformation [20][21] Management's Comments on Operating Environment and Future Outlook - Management noted a disciplined review of capital spending by customers, but did not observe a pullback in project flow [30] - The company expects the percentage of recurring revenue to continue increasing, enhancing financial predictability [18] - Management expressed confidence in the ability to grow both revenue and profitability during the transition to a SaaS model [22] Other Important Information - The company reported cash and investments of approximately $84.2 million at the end of January 31, 2019 [15] - Deferred revenues increased to $32.9 million, and shareholder equity stood at $114 million [15] Q&A Session Summary Question: Impact of new EVP of Global Sales on go-to-market strategy - Management emphasized the importance of focusing on customers with transformational supply chain strategies and highlighted the new EVP's experience in high-growth environments [25] Question: License decline due to SaaS transition vs. last year's large transaction - Management indicated that both the SaaS transition and an unusually large transaction last year contributed to the decline [26][27] Question: Customers' spending patterns amid economic uncertainty - Management noted a strong project pipeline but mentioned a more thorough review process for capital spending [30] Question: Capitalized R&D increase and future expectations - Management explained that increased R&D efforts were behind the jump in capitalized R&D, which is expected to return to trend levels [31] Question: Progress in SaaS transition and client adoption - Management stated they are at the midpoint of the transition, with 60-70% of new customer engagements leaning towards the subscription model [36] Question: Competitive positioning in the marketplace - Management highlighted the depth of capability and lower risk of deployment as key competitive advantages [40][41]